First Republic’s Star-Studded ‘Luminous’ Team Goes Independent
(Updated in second paragraph to indicate that advisors were managing $16 billion, not $15 billion.)
The former Merrill Lynch brokers who made “breakaway” history in 2012 by selling Luminous Capital, their four-year-old investment advisory firm, to First Republic Bank for $125 million are making headlines again.
Hou and Sear have become sole owners of Evoke Holdings, LLC, which has about 20 employees, including 11 who perform investment advisory functions, according to a May 31, 2019, filing that Evoke made with the Securities and Exchange Commission. They had registered the RIA in January under the cover name of Thomas Road Capital, and have dropped their brokerage licenses.
Zafran and Skinner have established IEQ Capital, an RIA in Menlo Park, Calif., where they serve as co-CEOs of the Silicon Valley firm, according to their LinkedIn Profiles. An April regulatory filing for IEQ Capital has few details about the firm, but lists its headquarters in Monterey. Eric S. Harrison, a former private equity firm official and First Republic veteran who began working with the Luminous partners in 2013, is also a co-CEO of IEQ Capital, according to his LinkedIn profile.
A person familiar with their departures from First Republic said that their non-compete agreements with the San Francisco-based bank company expired in December 2017.
The advisors never fully integrated into First Republic, as evidenced by their use of Fidelity Clearly & Custody as their custodian and broker, several people said. Evoke Holdings’ regulatory filing says it will continue to recommend to clients that they use Fidelity, which is reimbursing the RIA for transfer or account exit fees that First Republic may charge clients who follow them.
First Republic has been offering aggressive hiring packages to experienced wirehouse advisors in the past year, and just two weeks ago hired a $16-million team from Merrill Lynch Private Wealth Management.
None of the partners of the former Luminous team immediately returned requests for comment. RIABiz, an industry newsletter, said in a Sunday posting that Hou confirmed the team had split among themselves in a “very amicable separation.”
Evoke’s ADV filing with the Securities and Exchange Commission lists Daniel A. Kelso as its chief compliance and chief financial officer, but lists Hou and Sear as owners of the holding company. Evoke will continue to service high net worth individuals, family offices, trusts, estates, private foundations, charities, small businesses, and pension and retirement/profit-sharing plans, and has no minimum fees or asset thresholds for clients, the filing says.
IEQ’s advisory team includes Garret Giglia, a CPA and chartered financial analyst whose LinkedIn profile says he is a partner at the firm. He joined First Republic from Merrill in mid-2016, according to his BrokerCheck history. Also working with Skinner and Zafran are IEQ partners Jeff Westsmith and Ian Linford. Westmith is a CFA who has been with them since their days at Merrill Lynch, according to his LinkedIn profile. Linford’s profile says he began working at Luminous in 2011.
Hou, Sear and Zafran had been at Merrill from 1997 until their founding of Luminous in 2008. Skinner joined Merrill in 2000 after five years at Fidelity, according to his LinkedIn profile.